Tiffany & Co. v. Costco Wholesale Corp.
2014 WL 199603, 994 F. Supp. 2d 474, 109 U.S.P.Q. 2d (BNA) 1674 (2014)
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Rule of Law:
A defendant can defeat a motion for summary judgment on a claim of trademark genericness by proffering sufficient evidence to create a genuine dispute of material fact as to the primary significance of the mark to the relevant public, even if the mark is famous and incontestable.
Facts:
- Tiffany and Company ('Tiffany') is a luxury jeweler that owns numerous registered trademarks for the word 'Tiffany,' with some uses in commerce dating back to 1868.
- Tiffany markets and sells a specific style of solitaire diamond engagement ring with a six-prong setting, which it refers to as the 'Tiffany® Setting' ring.
- Costco Wholesale Corporation ('Costco'), a large warehouse retail chain, sold diamond engagement rings that were not manufactured by Tiffany.
- At a Costco store in Huntington Beach, California, point-of-sale signs for these rings described them using the word 'Tiffany,' such as 'Platinum Tiffany .70CT... Diamond Ring' and 'Platinum Tiffany... Diamond Solitaire Ring.'
- Costco had also used the non-capitalized phrase 'tiffany setting' in some of its online jewelry advertisements.
Procedural Posture:
- Tiffany sued Costco in the U.S. District Court for the Southern District of New York for trademark infringement and other related claims.
- Costco filed a counterclaim against Tiffany, seeking a declaratory judgment that 'Tiffany' is a generic term for a specific type of ring setting.
- Costco's counterclaim requested that the court order Tiffany's trademark registrations to be modified or cancelled to reflect this generic meaning.
- Tiffany filed a motion for summary judgment, asking the court to dismiss Costco's counterclaim before trial.
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Issue:
Is a defendant's counterclaim—alleging that a famous, incontestable trademark has become generic for a specific product category—subject to dismissal on summary judgment when the defendant proffers evidence of generic use in dictionaries, by competitors, and in media?
Opinions:
Majority - Swain, J.
No. The counterclaim is not subject to dismissal on summary judgment because a defendant can defeat such a motion by presenting sufficient evidence to create a genuine dispute of material fact regarding whether a mark has become generic. The court found that Costco presented enough evidence to create a factual dispute about the primary meaning of 'Tiffany' in the context of ring settings. The court explained that even an incontestable trademark can be challenged and canceled if it has undergone 'genericide,' where its primary significance to the public becomes the name of the product class rather than an indicator of source. The question of whether a mark is generic is a question of fact. Costco provided evidence, including dictionary definitions of 'Tiffany setting,' a lexicographer's report, and examples of competitors and publications using the term generically. While not conclusive, this evidence, when viewed in the light most favorable to Costco, was sufficient to prevent summary judgment and allow the case to proceed to discovery.
Analysis:
This opinion is significant because it affirms that even the most famous and legally protected trademarks are not immune to the defense of 'genericide.' It establishes that a defendant's burden at the summary judgment stage is not to definitively prove that a mark is generic, but merely to show a genuine factual dispute. The decision highlights the types of evidence (e.g., dictionary definitions, third-party use) that can successfully create this dispute, thereby allowing a case to proceed to discovery and trial. This reinforces the principle that trademark rights are dynamic and depend on public perception, potentially limiting the scope of a famous mark if it becomes synonymous with a product category.
